Lender Rules for Agents
Making an Offer on a Duffy Realty Short Sale is easy and should include:
1. Use our forms only please and don't make changes to anything already typed in. The forms are below listed as Residential or Condo. Click on links below and the contract will come up in Adobe or your PDF editor. You can print it and hand write it if you wish. Lenders no longer accept electronic signatures. We will not accept any additional Exhibits attached to the contract. Lenders need a clean contract with very few to no contingencies. Lending processors use software to figure the net. Too many complications in a contract causes the process to fail and thus, the processor gives up and just dumps the file. For this reason we will not accept any additional exhibits attached to the contract other than the Short Sale Exhibit that is included in the contract below. Please thoroughly read this exhibit as it does protect your buyer while covering all the bases needed to get the contract to sail through smoothly.
2. Look at the private remarks of the FMLS and MLS to see the details for earnest money and closing costs.
3. We do not accept Georgia Dream Financing due to their delay in processing the funding after approval. We apologize for this in advance.
4. If you would like to know about the types of loans or who the lenders are for these sellers, please check the tax record attached to the listing in FMLS or MLS. We feel it is a violation with our clients to disclose information beyond what is on the tax record. If there are 2 mortgages on the property, we work both at the same time for quicker results.
5. We accept the first offer that is at full price (send comps if you are sending offer for less), that is on our forms and has the terms listed on FMLS or MLS in the private remarks listed in the contract.
6. We then send the offer to the seller for their acceptance and signature.
7. We have to have a proof of funds in your buyer's name (as stated on the contract) and dated within 30 days of the date of the contract OR a pre-qualification letter for your buyer (as stated on the contract).
If you need a pre-qualification letter quickly, please call Peachtree Home Loans at .
8. Effective , new Housing and Urban Development (HUD) guidelines require agents to have all FHA short sale properties listed on the Multiple Listing Service (MLS) for a minimum of 15 days before any purchase contract can be reviewed by the servicer. Note: The 15-day requirement starts when the property began listing on MLS.
To write an offer - please write [email protected] for the approved offer forms.
We Negoiate Short Sale Contracts Monday - Friday 9am- 6pm
Agents & Buyers: These are the guidelines that we follow to do a successful short sale.
First, only 2% of the agents in real estate have any short sale training.
Rhonda Duffy is the ONLY Elite certified CDRS short sale specialist in Georgia and has closed 100s of short sales. Duffy Realty also utilizes a law firm that takes over after package collection from the Seller and after we have a binding contract between the buyer and seller. They are legal wizards and work equally hard to close every deal with a great outcome for everyone involved.
Second, only about 25% of short sales actually close. Our closing ratio is MUCH higher!
And in the case where a buyer is successful they report that they feel great about the purchase.
A short sale is when the seller is asking the lender to allow them to sell the property without paying the full amount owed the lender. Some sellers have 2 loans on the property so the seller will be asking both lenders.
Sellers have to show a hardship and show that they do not have the assets to pay for the home any longer. The lender is expecting the seller to be broke at the time of the short sale.
The paperwork that a seller has to submit to the bank is very intense. Some sellers fail to do this properly.
The offer can not be submitted without a hardship letter and the correct paperwork.
It takes almost 3 months to get all the pieces in place to get an approval from the lender(s). Once the package is put together, it is uploaded to the bank by the listing agent.
After about 5 weeks, the listing agent is contacted (often for the first time) by the lender(s) to verify that everyone is still in place ready to sell and buy.
The lender will then order the appraisal to check the value of the property and to make sure that the listing agent has properly listed the property.
Then, they start negotiating with the seller to get a cash contribution or promissory note from the seller and the seller decides what to do next.
Lenders use the following calculations to determine what they are willing to take.
It is very rare for them to stray from these calculations.
Because of these calculations, short sale offers should be very close to the fair market value. 15% of Fair Market Value determined by appraisal + 6% commission + any taxes, HOA fees, liens etc… So the home is sold at 92% +/- of fair market value.
Closing costs rules: The rules are based on the type of first mortgage that is being shorted and the type of loan the buyer is getting.
If you need a lot of closing costs, a short sale is not for you.
Seller Loan Type: Conventional – the lender will pay up to 3% with a fair market value offer
VA - the lender will pay up to 3% with a fair market value offer
FHA – up to 1% IF you are getting an FHA loan. If you are getting a conventional loan or a VA loan, the lender will pay 0 closing costs.
The listing agent should know what type loan the seller has. Repairs: Lenders expect the seller to be broke at the time of closing thus the seller can not make any repairs. Lenders do not make repairs.
You are buying the house “as-is”. You can do an inspection, which is recommended.
If you don’t have the money to make repairs, a short sale is not for you.
Termite Letters: Lenders do not pay for termite letters.
Home Warranties: Lenders do not allow home warranties to be paid by the seller.
Remember that the seller needs to have no additional concessions per lender requirements.
Close Date: Close dates need to be at least 90 to 120 to 150 days from the time of offer.
If you need to close quickly, a short sale is not for you.